auto collision repair products

Many of you may have heard about GM’s new parts pricing initiatives that were announced last week during SEMA. You may also have heard that the program has been temporarily halted. Below is the updated statement from GM. What I can tell you is that SCRS has been in contact with them much in the past week+ and are currently working on summarizing exactly what the program is – and what it is not. We should have that prepared shortly.

GM has been very clear that there are only three entities that are part of their focus; the repairer, the consumer and the dealers. To me, that is refreshing.

“GM remains committed to its consumer focused pricing initiative, MyPriceLink.com. The strategy is designed to provide a competitive price available when an estimate is being prepared resulting in the best possible repair for all GM vehicle owners. GM has received overwhelming interest and support for its best price forward pricing strategy from all constituents throughout the Collision repair industry. By providing our price up front in the estimating process, we continue to focus on helping our GM customer, allowing the vehicle to be returned to pre accident condition, with original parts, ensuring safety and appearance.

“Over the past week the workflow pressures on outside parties has brought to light enhanced solutions and the increased desire for integration opportunities. These efforts will improve the process and allow for a longer implementation lead time so the revised workflows can be absorbed to the benefit of all of our General Motors customers, dealers and body shops. To this end, GM has listened, and has agreed to pause and extend the implementation of MyPriceLink.com.

“In the interim GM will resume the publishing of list price until we implement MyPriceLink.com. The extended implementation time frame, allows for all parties to prepare and adjust as needed in order to begin getting GM list prices from the MPL.com price engine. We expect to have a fully functioning dynamic pricing process through MPL in market by early 2015.

“GM appreciates the interest and support MPL.com has received and looks forward to collaborating with all constituents in the collision repair industry to implement the new way in which GM list prices will be obtained.”

Ford engineer Gerry Bonanni says the construction of the 2015 aluminum F-150 will allow easier repairs. “The advantage to the technician and body shop is they have repair options they would not have had.”

It wasn’t your typical convention display: a color-coded body-in-white cutaway of the Ford F-150 pickup that looked like an oversized Fisher-Price toy.

But Ford Motor Co. was using the toy store approach to make a serious point to dealers: The economics of an aluminum truck – both the repair costs for the customer and the body shop operations for the dealer – make sense.

“We’ve made a lot of really significant changes for repairability,” Jim Farley, Ford global vice president of marketing, sales, service and Lincoln, said at the National Automobile Dealers Association convention here. “They will help save a lot of labor costs.”

For those with an engineering bent, the display provided a fascinating first look at how construction and repair of the nation’s top-selling vehicle will change with the aluminum redesign.

In a January 2013 study from the Property Casualty Insurers of America (PCI), their own research shows that if Aftermarket parts were banned, this would result in a $24.00 overall increase in premium prices per insured car per year.

Excerpted from the report:

This PCI Special Report provides an update of the estimated cost impact resulting from the banning of aftermarket parts.

If non-OEM competitive replacement parts are no longer used, this may result in an additional $2.34 billion in insurance costs per year that could be passed on to drivers in the form of higher premiums.

The insurance premium reflecting vehicle damage coverages may increase by about 4.2 percent more per insured car. This translates into a 2.6 percent increase in the combined liability and physical damage premium per insured car if non-OEM parts could no longer be used. On average, this means about $24 added to the overall premium per insured car each year.

Is the friction, the argument and the concern over using aftermarket parts really worth $24.00 per year per insured vehicle?

Given the amount of inquiries that we receive at the DEG I assume the replacement of a quarter panel with a used part is still a valid repair scenario for some vehicles. I would challenge that if you look at the necessary steps needed to replace a quarter panel with a used part it could not be cost effective. Now, if you are using a fictitious number like “4 hours” to remove the outer skin from the donor part then yes, on paper, it may be a valid and cost effective repair but I assure you that each vehicle is different and requires different labor times to remove the used quarter from the donor vehicle. Let’s take a closer look:

First, all three estimating systems Audatex, CCC and Mitchell create the time to replace an LKQ quarter panel base on the fact that you will be replacing the outer and inner components as a complete assembly which I am sure is not how most of us are replacing that used panel . Typically we are removing the outer skin and replacing that part only. I think the “4 hours” that some adjusters still use is based on the outdated idea of trimming the parts to be replaced as the entire component inner and outer, which is still incorrect and should vary from vehicle to vehicle.

Second each vehicle requires a different amount of time to remove the outer quarter skin from the donor part. An example could be most vehicles have an excessive amount of foams and sealers that need to be carefully removed so not to damage the LKQ part but that amount varies from each vehicle. If you look at most LKQ quarter prices versus the OEM price the difference is in the $300 to $350 range after markup and by using the fictitious 4 hours, yes, it would be cost effective but if you were to breakdown each step needed , AND charge for that step it will not be cost effective. Think of the amount of time needed just to remove all the components from the donor vehicle;

Quarter glass (on some vehicles)

Back glass or a portion. Most LKQ parts are delivered with a portion of the glass still attached

Moldings and trim

Splash shields

Inner trim inside trunk

Trunk hinge

Quarter vents

Door opening weatherstrips

Door latch on dog leg

Door sensors and plugs located on dog leg

These items alone could account for a majority of the cost saving from the LKQ part versus the OE part and we have not started the removal process yet.

Now that all the additional items are removed from the LKQ part we can look at the tedious task of removing the skin form the donor part. One of the first steps is removing the seam sealers, urethanes and paint from the part to access the spot welds. Looking at a corolla there is about 25+ feet of pinch welds, and flat surfaces that need to be ground to access the welds or to prep the surface for welding. 25 feet!! After that we need to drill out spot welds, which could be 60+ welds, separate the panels, clean the removed panel and dress the flanges that where damaged by removal, clean the matting surfaces then if all goes well we have a part than could be welded to the customer’s vehicle.

Spelling this out on paper does not give it justice. I recommend visiting the DEG website and viewing the video that Toby Chess had completed for a past CIC meeting of the necessary steps needed to remove the outer skin from the donor vehicle. After viewing the video I think you will agree that each vehicle requires its own evaluation of time and the “4 hours” that is typically used IS NOT SUFFICIENT in most repair scenarios. You can view the video by visiting the DEG website at www.degweb.org then select the “Get Educated” Tab and click “Knowledge Base”, or by clicking the link here.

On Sept. 17, 2012, State Farm announced that the pilot program for PartsTrader was being expanded to Chicago, and collision repairers would start actively using it in December. In short order, they reported that 475 of 477 Select Service repairers in Chicago had registered for the program. Today, State Farm says all 477 have now signed up. But supplier participation is another story.

More than a few repairers are reporting that many suppliers are actively resisting PartsTrader. One shop reported that State Farm sent it a letter indicating only 48 percent of its suppliers had completed the registration process. The insurer says 266 suppliers of all part types to date are participating in PartsTrader.

“Data provided by PartsTrader suggests Chicago suppliers that are actively participating in the quoting process are generating more parts orders overall than those who have opted to only receive fax orders,” said George Avery, claims consultant with State Farm.

And as roll-out continues, Avery says that PartsTrader data also suggests repairers are shifting to participating suppliers from fax-only suppliers.

One repairer says PartsTrader has been shutting down its fax service at 5 p.m. Then, at 8:30 a.m., the fax machine is spitting out pages of parts orders that had been entered via PartsTrader at 3 p.m. the day before. He said PartsTrader has stated the fax service will end in 2014. He also said it seems PartsTrader is “punishing” dealers that have chosen the fax route. Evidence, he claims, is listing one of the largest Chrysler dealers in the area as an Isuzu/Suzuki dealer.

“That took several phone calls to change, and who knows if it will change back?” he said.

American Honda announced the launch of a new consumer website, AirbagAware.Honda.com, designed to increase awareness among consumers about the growing problem of counterfeit airbags.

Included on the site is the original October 2012 NHTSA Counterfeit Air Bag Consumer Alert, stories of those people facing criminal charges for selling counterfeit airbags, a dramatic video showing the deployment of several counterfeit airbags versus Honda Genuine airbags, and more. The AirbagAware.Honda.com website will be free-standing, but will be connected to the existing American Honda consumer website, Collision.Honda.com.

Jim Roach, Senior Vice President for American Honda’s Parts and Service Division said, “Counterfeit airbags are a growing concern because of the potential danger they pose not only to Honda owners, but to the general public. Every Honda owner should visit this new site to understand why they should demand that their collision-damaged car is properly and safely repaired.”

To promote the new website and increase consumer awareness, Honda dealers will be receiving a supply of Consumer Information Kits including a small supply of kits to distribute to collision repair shops. Shops can order additional kits, free of charge, by calling 440-572-7266 and order item #CPHABK12. The site will also be supported through advertising in various collision industry magazines.